Glossary
The terms that come up in Kenyan business records, defined plainly and linked to the pages that go deeper.
eTIMS
KRA's electronic tax invoice system, through which businesses transmit invoice details and receive validated electronic tax invoices.
Kenya Revenue Authority
The national authority responsible for assessing and collecting tax revenue in Kenya.
TIMS
The earlier electronic tax invoice system that relied on a compliant electronic tax register with a physical control unit.
ETR
An electronic tax register: the hardware device used under the earlier control-unit approach to recording tax invoices.
Tax invoice
The document recording a supply and the tax charged on it, carrying the particulars prescribed in law.
Receipt
Proof of payment given to a customer, which is not necessarily a tax invoice.
Credit note
A document reducing the value of an invoice already issued, referencing that original invoice.
Debit note
A document increasing the value of an invoice already issued, referencing that original invoice.
KRA PIN
The Personal Identification Number KRA issues to a taxpayer, used to identify them across tax systems.
iTax
KRA's online portal for taxpayer registration, returns and payments.
VAT
Value Added Tax, charged on taxable supplies of goods and services in Kenya under the VAT Act, 2013.
Income tax
Tax charged on the income of a person or business under the Income Tax Act.
Turnover Tax
A tax charged on gross business turnover within a band set in the Income Tax Act, rather than on profit.
Withholding tax
Tax deducted at source by the payer from certain payments and remitted to KRA on the payee's behalf.
Excise duty
Duty charged on specified goods and services, including alcoholic drinks and certain financial and telecommunication services.
Deductibility
Whether an expense may be subtracted from income in computing taxable profit.
Turnover
The total value of sales a business makes in a period, before costs.
Margin
What remains from a sale after the cost of what was sold.
Cost of goods
What the business paid for the goods it sold, including what it took to get them onto the shelf.
Inventory
The goods a business holds for sale, and the record of what it holds.
Stock take
Counting what is physically present and comparing it against what the records say should be there.
Shrinkage
The gap between stock the records say a business has and stock it actually has.
POS system
The system a business uses to record a sale at the point it happens, and usually to print or send the customer document.
Invoicing software
Software that produces invoices and keeps a record of them.
M-Pesa
The mobile money service most Kenyan businesses receive payments through.
Till number
The M-Pesa business shortcode a customer pays into.
Reconciliation
Matching money received against sales recorded, so that every payment is explained and every sale is paid for.
Record keeping
Keeping the documents and data that support what a business reports.
Tax audit
A review by KRA of a taxpayer's records and returns.
Purchase invoice
The tax invoice a business receives from its supplier, which supports its own expense claim.
Tax Procedures Act
The Act governing how tax is administered in Kenya, including records, assessments and penalties.